Board-level Representation

Employee representatives in Ireland’s single-tier boards are only found in the state-owned sector, where they normally account for a third of the total. Privatisation has cut the number of companies covered and the process is continuing.

There is no statutory requirement for board level representation in the private sector – Ireland has a single-tier board system. Some parts of the public sector are, however, covered by legislation that gives employee representatives a right to seats on the board of state-owned enterprises and agencies. The representatives are normally known as worker directors. As well as public bodies, such the Courts Service, there are a number of state-owned businesses with employee representatives at board level. They include: the national postal service, An Post; Dublin Airport; Dublin Port; the national transport group, CIE; the peat processing company Bord na Móna; the Electricity Supply Board; the gas distribution company, Bord Gáis, and the forestry company, Coíllte.

In the larger companies, covered by legislation passed in 1977 and 1988, employee representatives have a third of the seats on the board (usually four out of a board of 12 directors who also include the chief executive). Candidates are nominated by the unions, who have sole nominating rights, but elected by the whole workforce. The relevant minister then appoints the successful candidates.

The extent of employee representation at board level has been affected by the privatisation of a number of previously state-owned companies. One example is Aer Lingus, the former state-owned airline, which was partially privatised in October 2006, resulting in the removal of the former worker directors. At first, an employee share ownership trust was established with two seats on the board, but in 2010 it was dissolved, the shares distributed and the right to the seats was lost. There continues, however, to be an agreement that employees should be represented at board level and David Begg, the previous general secretary of the ICTU, is a non-executive director of Aer Lingus, although the company is facing a takeover bid..

This process of privatisation is likely to be accelerated as part of Ireland’s response to the economic and financial crisis, which in turn will lead to a further reduction in the number of state-owned companies with employee board level representation.